SDA Back on Track to Award Satellite Contracts After Funds Went to Troop Shutdown Pay

The Space Development Agency says it’s on track to issue its next batch of missile warning and tracking satellite contracts this month after those awards were delayed by the Pentagon’s decision to divert funds from the agency to pay troops during this fall’s prolonged government shutdown.

SDA had expected to award contracts in October and December for Tranche 3 of its missile warning and tracking satellite layer. A spokesperson for the agency told Air & Space Forces Magazine that while the Pentagon did shift some money appropriated for the effort to cover military payroll, “all funds have been restored and SDA is preparing to finalize selection(s) and make the award(s) public soon.”

The Department of Defense has traditionally relied on Congress to pass legislation to pay troops during government shutdowns. However, during the most recent shutdown—which ran from Oct.1 to Nov. 12—no legislation was passed and the department opted to transfer $8 billion in previously appropriated funds for various research and development programs to cover the cost. The unconventional move raised eyebrows and questions about the legality of moving appropriated funds without congressional approval.

Breaking Defense first reported that the Pentagon had tapped SDA funds to pay troops. 

A spokesperson declined to confirm the amount of money the department moved from SDA’s Tranche 3 Tracking Layer effort. According to fiscal 2026 budget documents, the agency planned to award $236 million in October and $535 million in December to procure a total of 54 satellites. 

SDA is in the midst of building out its Proliferated Space Warfighter Architecture, or PWSA—a constellation of data transport and missile warning satellites in low-Earth orbit. To keep pace with a changing threat environment and evolving technology, the agency is fielding the spacecraft in batches, or tranches, every two years.

It currently has eight missile warning and tracking and 19 data transport satellites in orbit as part of its Tranche 0 experimental constellation. 

SDA began a 10-month campaign in September to launch Tranche 1 capabilities and had a second launch in October. Those spacecraft are undergoing initial testing and checkout.

The agency had planned additional launches this year, but the spokesman told Air & Space Forces Magazine that a “software readiness issue” and launch logistics challenges—including limited access to payload processing facilities—have delayed further missions until early 2026. 

“As with previous launch campaigns, we have some built in manifest flexibility to allow for changes and delays,” SDA said. “We are working diligently to address the causes for the delay and we do not expect significant impacts to the overall PWSA capability delivery schedule.”

All told, SDA expects to launch 154 spacecraft as part of Tranche 1—126 communication satellites and 28 missile warning birds.